A Republican-controlled committee of lawmakers approved a bill on Tuesday to allow a congressional audit of Federal Reserve monetary policy, a proposal Fed policymakers have opposed and which faces an uncertain path to final approval.
Continue Reading Below
Democrats uniformly spoke against the proposal during a meeting of the House of Representatives Committee on Oversight and Government Reform, suggesting the bill would face stronger resistance than in the past.
"We should not in any way hinder their independence," said Representative Carolyn Maloney, a New York Democrat, echoing the sentiment of Fed policymakers who say they could come under political pressure to avoid making unpopular decisions such as raising interest rates to slow growth and control inflation.
The next step for the bill would be a floor vote by the entire House, where Republicans hold a solid majority.
Republican President Donald Trump expressed support for audits of the U.S. central bank during his election campaign, but it remained unclear whether the White House would back the proposal.
Republicans proposed numerous bills during the Obama administration to open the Fed up to deeper scrutiny, arguing the added transparency would ensure the Fed was accountable and free of outside influence.
Currently, the Fed publishes detailed audits of its finances but it keeps the inner workings of its monetary policy deliberations secret, publishing transcripts of policy meetings only with a five-year lag.
The proposal approved on Tuesday would "put an end to that reign of secrecy," said Representative Thomas Massie, the Kentucky Republican who submitted the bill.
The House has already passed versions of the bill twice, with dozens of Democrats joining nearly unanimous Republican support in 2012 and 2014. Those versions of the legislation died in the Senate.
Republicans control both houses of Congress but only have a narrow majority in the Senate.
Representative Stephen Lynch of Massachusetts was among Democrats who voted in favor of similar legislation in 2012 and 2014 but came out against the current proposal, saying it could lead to political interference at the Fed.
Lynch said he hoped a compromise could be found that increased transparency at the Fed, such as by requiring it to publish transcripts of policy meetings two years after they take place.
(Reporting by Jason Lange; Editing by Andrew Hay)